<DOC>
[DOCID: f:k94-275.wais]
DAY BRANCH COAL CO., INC.
March 28, 1995
KENT 94-275
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
OFFICE OF ADMINISTRATIVE LAW JUDGES
2 SKYLINE, 10th FLOOR
5203 LEESBURG PIKE
FALLS CHURCH, VIRGINIA 22041
March 28, 1995
SECRETARY OF LABOR, : CIVIL PENALTY PROCEEDINGS
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA), : Docket No. KENT 94-275
Petitioner, : A.C. No. 15-16418-03549
v. :
: Docket No. KENT 94-921
DAY BRANCH COAL CO., INC., : A.C. No. 15-16418-03557
Respondent :
: Docket No. KENT 94-388
: A.C. No. 15-16418-03551
:
: No. 9 Mine
:
: Docket No. KENT 94-276
: A.C. No. 15-16927-03543
:
: Docket No. KENT 94-389
: A.C. No. 15-16927-03547
:
: Docket No. KENT 94-390
: A.C. No. 15-16927-03548
:
: No. 10 Mine
DECISION
Appearances: Joseph B. Luckett, Esq., Office of the
Solicitor, U.S. Department of Labor,
Arlington, Virginia, for Petitioner; Walter
M. Jones, Jr., Esq., Wyatt, Tarrant &
Combs, Louisville, Kentucky, for Respondent.
Before: Judge Fauver
These civil penalty cases were brought by the
Secretary of Labor for alleged violations of safety and
health standards under � 105(d) of the Federal Mine
Safety and Health Act of 1977, 30 U.S.C. � 801 et seq.
Respondent is a small to medium sized operator.
The cases involve 40 alleged violations, 28 of which
were the subject of special assessments. The total
proposed penalties are $94,939.
Respondent concedes the violations, but contends
the penalties should be only nominal because the
proposed penalties would adversely affect Respondent's
ability to continue in business. No other defenses
are raised.
Ms. Betty Cassim, the office manager and
bookkeeper of Respondent, testified that Respondent is
owned by Mr. Bobby Joe Hensley, the president of the
corporation, who also owns other corporations, such as
Bob and Tom Coal Company. Respondent has been
operating at a loss for several years. Respondent and
another corporation owned by Mr. Hensley have
outstanding debts to vendors in the amount of $250,000
with more than half of this amount owed by Respondent.
Recently, a United States District Attorney filed a
collection suit against Respondent for over $500,000
in final civil penalties and interest due under the
Mine Act. Ms. Cassim stated that Respondent is unable
to pay the amounts involved in that case.
Mr. James Laws also testified on behalf of the
Respondent. Mr. Laws is a tax consultant who has
worked for Mr. Hensley for approximately 15 years.
He stated that Respondent had entered into an
agreement with the Internal Revenue Service for
installment payments of back taxes over $138,000,
but IRS has recently informed him that it intends
to void the agreement for nonpayment and to seize
Respondent's assets and shut down its operations.
Mr. Laws stated that no litigation was expected by
Respondent to prevent this action by the IRS.
DISCUSSION WITH FURTHER FINDINGS, CONCLUSIONS
Section 110(i) of the Act provides six criteria
to be considered in assessing civil penalties:
The Commission shall have authority to
assess all civil penalties provided in this
Act. In assessing civil monetary penalties,
the Commission shall consider the operator's
history of previous violations, the
appropriateness of such penalty to the size
of the business of the operator charges,
whether the operator was negligent, the
effect on the operator's ability to continue
in business, the gravity of the violation,
and the demonstrated good faith of the
person charged in attempting to achieve
rapid compliance after notification of a
violation. In proposing civil penalties
under this Act, the Secretary may rely upon
a summary review of the information
available to him and shall not be required
to make findings of fact concerning the
above factors.
The effect of a penalty on the operator's ability
to continue in business is not dispositive, but is one
factor to consider. The Act does not state that mine
operators who are operating at a loss are exempt from
civil penalties or should receive only nominal
penalties.
Respondent has a long history of serious,
repeated mine safety and health violations and has
regularly failed to pay about 80 percent of the final
civil penalties assessed against it under the Mine Act.
[1] This conduct plainly jeopardizes its employees
while disadvantaging competitors who pay final civil
penalties due under the Act.
The instant cases involve numerous charges of high
negligence, unwarrantable failures to comply with the
Act and high gravity in exposing Respondent's employees
to serious hazards. Respondent has not contested the
charges.
The record shows numerous liabilities incurred by
Respondent with no apparent intention of paying them.
These total well over $1 million in unpaid federal
taxes, accounts due to banks, suppliers and
manufacturers, and civil penalties for mine safety and
health violations.
Thus, Respondent is a frequent, serious violator
of mine safety and health standards that seeks an
exemption from civil penalties (or to be assessed only
nominal penalties) because of financial hardship. On
this record, I find that it would be contrary to the
public interest and to the safety of Respondent's
employees, to allow Respondent to violate mine safety
and health standards with only nominal civil penalties.
Respondent's business conduct in failing to meet
its financial obligations, including federal income
taxes, bank loans, accounts payable, and civil penalties
for serious mine safety and health violations, may cause
it to go out of business. However, this result is not
prohibited by � 110(i) of the Act.
In balancing all the criteria in � 110(i), I find
that the proposed civil penalties in these cases should
not be reduced.
CONCLUSIONS OF LAW
1. The judge has jurisdiction in these proceedings.
2. Respondent violated the safety and health standards
as alleged in the 40 citations and orders involved in
these cases.
3. The proposed penalties are found to be appropriate
for the violations involved. Accordingly, Respondent is
assessed civil penalties of $94,939.
ORDER
WHEREFORE IT IS ORDERED that:
1. The 40 citations and orders involved in these
proceedings are each AFFIRMED.
2. Respondent shall pay civil penalties of $94,939
within 30 days from the date of this Decision.
Provided: the Secretary may agree to a schedule of
installment payments with accrued interest if the
Secretary determines that such schedule is
appropriate and in the public interest.
William Fauver
Administrative Law Judge
Distribution:
Joseph B. Luckett, Esq., Office of the Solicitor, U.S.
Department of Labor, 2002 Richard Jones Road, Suite
B-201, Nashville, TN 37215-2862 (Certified Mail)
Walter M. Jones, Esq., Wyatt, Tarrant & Combs, 2600
Citizens Plaza, Louisville, KY 40202 (Certified Mail)
/lt
**FOOTNOTES**
[1]: Under � 105(a) of the Act, proposed civil
penalties that are not contested by the operator, and
penalties adjudicated before the Commission, become
final orders of the Commission.
These are not subject to review by any court or
agency. I find that failure of the operator to comply
with such orders is an adverse factor in assessing
the operator's "history of previous violations" under
� 110(i) of the Act.